Insurers provide a "price point" for everyone
American Medical News
Aug. 25, 2003
Insurers post robust profits for the second quarter
By Robert Kazel
Springtime brought a bumper crop of profits for most of the nation’s large,investor-owned HMOs, and several even reported record-breaking financial
results for the second quarter.
Just about all of the leading health care payers met or surpassed their stated profit goals by raising premiums, redesigning products to shift costs to patients and cutting overhead. All insurers also benefited from an apparent decrease in medical cost acceleration.
Insurers are increasing profits as they learn how to succeed in tailor-making health plans to employers, which today typically means selling companies budget-minded products that require patients to pay more,said Ken Abramowitz, an analyst with the Carlyle Group, a New York investment firm.
“In the old days these companies used to sell one HMO at one price point, and the client would buy or didn’t buy,” he said. “Now there is a broad [range] of products and prices. There is a price point for everyone.”
http://www.ama-assn.org/sci-pubs/amnews/pick_03/bisc0825.htm
Comment: Now there is “a price point for everyone.”
Private health plans have ratcheted down rates for providers, wringing that sponge dry. They have pushed up premiums for employers and otherpurchasers
to the maximum tolerated. That leaves only the patient as the source of increased health plan net revenues. By reducing benefits and increasing cost
sharing, the insurers are able to create a “price point” that may appear to be affordable for moderate and low income individuals, but it purchases a Swiss cheese product that is marketed in yet smaller and smaller packages.
And it can only get worse. The tragedy is that most proposals for reform continue to use these evolving plans in the health care marketplace as the basis for reform. What good does it do to have “universal” coverage if the plans fail to make health care affordable for the individual with significant health care needs?
Our policymakers urgently need to shift from policies that protect and
nurture the private health plans to policies that would ensure affordable, comprehensive coverage for everyone. The Physicians’ Proposal (JAMA, Aug.13) would do just that.